Insurance companies are investing an increasing proportion of IT budgets and resources on initiatives collectively described as IT transformation -- but they're not alone. And with these transformation efforts come a number of challenges around security, data management and new customer interaction channels.
A new study from Protiviti suggests that efforts to modernize and transform core systems and infrastructure are occurring across many industries -- driven largely by requirements all types of businesses are facing to deliver added value, enhance business performance and increase security. Nearly two out of three (63%) CIOs and information technology professionals report there is a "major IT transformation" underway in their organizations, according to Protiviti's 2014 IT Priorities Survey.
[Insurers are struggling to improve customer loyalty: Profiting from Great Insurance Customer Experiences]
In addition to helping improve companies' performance, these initiatives also are having an impact on the roles of CIOs and other technology executives, who are adapting to a broader scope of responsibilities, and are shifting further from supportive functions and more toward an integrated aspect of overall business strategy and operations, according to the report.
"More so than in prior years, IT departments are not only altering their structures, they are transforming their fundamental mission," said Kurt Underwood, a managing director with Protiviti and global leader of the firm's IT consulting practice, in a press release. "The IT function's objective is evolving from simply responding to last year's technology requests to helping shape aspects of business strategy through execution with an integrated approach to operations that adds value and protects the enterprise."
More than 1,100 executives, including CIOs, IT vice presidents, and IT directors, participated in the research. Based on the survey findings, the top five major areas that present the most pressing challenges for IT professionals are:
1. Enhancing and protecting business value: Aligning and integrating IT risk management and business continuity capabilities with broader, long-term business strategy.
2. Cybersecurity: Managing and strengthening security and privacy for the organizations' systems and data is now a top priority across all industries.
3. Data classification: Effectively organizing, managing, and securing growing amounts of data within the organization.
4. IT asset and data management: Improving data and information governance programs, driven by the growing use of mobile devices and applications and the continued integration of cloud computing into IT strategy and processes.
5. Mobile platforms and social media: Incorporating secure, integrated systems for mobile commerce, devices, etc., and addressing social media safeguards and strategy within the organization.
The IT Priorities Survey assessed the importance of a variety of areas across 10 different technology-related categories. When asked to rate specific areas that are considered priorities on a scale of one (lowest) to 10 (highest), respondents consistently ranked topics linked to cybersecurity and managing data privacy as "significant priorities" (greater than 6.0) across several different categories, Protiviti reports. In the Managing Security and Privacy category, both "developing and maintaining security and privacy standards" and "monitoring security events" ranked highly with a 6.4 rating. Numerous aspects of "incident response" also ranked highly with a 6.3 rating and "managing and classifying enterprise data" was deemed to be a "significant priority" as well with a 6.2 rating.
Respondents also have placed added emphasis on preparedness to protect against business disruptions such as natural catastrophes and cyber-attacks, the study found. In the Ensuring Continuity category, "Business continuity management and disaster recovery program testing;" "developing and maintaining IT disaster recovery plans;" and "ensuring business alignment" all ranked highest with ratings of 6.2.
Additionally, it appears from the survey results that there will be an increased emphasis across multiple industries on integrating IT into the broader enterprise. In the Defining IT Governance and Strategy category, issues including "key performance indicators and monitoring IT costs and benefits," as well as "integration/alignment of IT planning and business strategy" ranked among the highest priorities with a 6.5 rating.
[To learn more about how insurance companies are preparing for and responding to security incidents, attend the Acknowledge the Inevitable: How to Prepare For, Respond to, and Recover from a Security Incident session at Interop 2014 in Las Vegas, March 31-April 4.
You can also REGISTER FOR INTEROP HERE.]
Katherine Burger is Editorial Director of Bank Systems & Technology and Insurance & Technology, members of UBM TechWeb's InformationWeek Financial Services. She assumed leadership of Bank Systems & Technology in 2003 and of Insurance & Technology in 1991. In addition to ... View Full Bio